CSU hasn't supported claims of stadium's economic benefits

Nov. 18, 2012

I am wondering if the potential CSU stadium donors realize the unintended consequences of their gifts on the Fort Collins economy.

Tony Frank recommended that the proposed new stadium be given a green light if $125 million in “philanthropic gifts” were raised within two years. The Board of Governors approved the measure.

The official CSU definition of gifts is that both cash and pledges, five years maximum, will be counted toward the $125 million.

On KOA radio, Jack Graham stated that he needs $300 million. The bond issuers usually want a buffer of a year’s debt service banked in case the projected revenue does not come in as forecast. The bonding agency will want 5 percent to 8 percent for their services.

Scenario 1: CSU gets $125 million in hard cash. They then need to finance $175 million to complete the stadium, plus a pad of $10 million. In order to yield $185 million, the bond package would be $200 million ($175 million plus $10 million times 1.08). Per the financial data Jack Graham presented to the BOG on Aug. 3, the yearly debt service for the bonds will be about $12 million.

Scenario 2: Let’s assume that the $125 million in gifts is a split of $50 million in hard cash and $75 million in pledges. CSU will need to finance $280 million. The debt service will be closer to $17 million per year.

If the pledges roll in as promised, it will gradually reduce the higher debt service over the five years to the $12 million level.

How will CSU pay off these bonds? In an Oct. 29 interview in the Denver Post, Brett Anderson, vice president for development, stated, “If they’re (football fans) already on campus, they are a captive audience.”

How will this affect the local businesses in the Fort Collins area? Other than naming rights, CSU will need to extract $12 million to $17 million more out of these fans in the form of higher prices for seats, merchandise, parking, food and beverage and tailgating fees. These millions of dollars will come directly out of the citizens’ entertainment budgets and dollar for dollar out of the local businesses.

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CSU said the stadium will be a multi-use facility with conference and meeting rooms. The university is spending $60 million to renew the Lory Student Center, which has similar rooms. A multi-use stadium will further exacerbate the drain on the local economy, and the multimillions in costs for local support infrastructure is not factored in.

In an email, CSU Chancellor Mike Martin said, “You can get on the train (new stadium build) or in front of it.” He also said, “This is a campus issue.”

We are choosing to get in front of the train, as a new stadium will have a drastic negative impact on the Fort Collins economy.

In a Coloradoan article, CSU’s Linda Stanley, Ph.D, wrote, “... stadiums are not a source of local economic growth” and “We are told by supporters of the on-campus stadium that shops and restaurants downtown and closer to campus will benefit. Show us the numbers!”

If CSU figures it differently, they better show you their numbers before you show them your support.

No, Dr. Martin, it is not just a campus issue; it is a Fort Collins issue.